New grants for businesses affected by local lockdowns

UPDATE: In December 2021 the government has announced additional financial support for businesses impacted by the Omicron variant.

Ministers have announced new grants for businesses affected by local lockdowns. Businesses in England that are required to shut because of local interventions will now be able to claim up to £1,500 per property every three weeks.

The scheme will help provide a safety net to further protect jobs where a business is required to close and comes in addition to billions of pounds of existing loans, grants and tax breaks as well as the Chancellor’s Plan for Jobs.

Chief Secretary to the Treasury Steve Barclay told MPs that businesses in England required to close due to local lockdowns or targeted restrictions will now be able to receive grants worth up to £1,500 every three weeks.

To be eligible for the grant, a business must have been required to close due to local Covid 19 restrictions. The largest businesses will receive £1,500 every three weeks they are required to close. Smaller businesses will receive £1,000.

Payments are triggered by a national decision to close businesses in a high incidence area. Each payment will be made for a 3 week lockdown period. Each new 3 week lockdown period triggers an additional payment.

Business Secretary Alok Sharma said:

"No business should be punished for doing the right thing, which is why today’s package will offer additional breathing space for businesses that have had to temporarily close to control the virus."

"Through our wider Plan for Jobs, we will continue to back our innovators and job creators across the country who are playing a critical role as we build back better from the pandemic."

Responding to the announcement, The Federation of Small Businesses’ (FSB) National Chairman Mike Cherry said:

"Though a lot of firms have now been able to reopen, thousands are still impacted by local lockdowns."

"That’s why this intervention is so critical - throwing a much needed additional financial lifeline to those most harmed."

"We look forward to working together with local government to make sure there is a straightforward process for all firms affected."

• any businesses still closed at a national level (e.g. nightclubs), will not be eligible
• if a business occupies a premises with a rateable value less than £51,000 or occupies a property or part of a property subject to an annual rent or mortgage payment of less than £51,000, it will receive £1000
• if a business occupies a premises with a rateable value of exactly £51,000 or above or occupies a property or part of a property subject to an annual rent or mortgage payment of exactly £51,000 or above, it will receive £1500
• Local authorities will also receive an additional 5% top up amount of business support funding to enable them to help other businesses affected by closures which may not be on the business rates list. Payments made to businesses from this discretionary fund can be any amount up to £1500, and may be less than £1000 in some cases.
• Local authorities will be responsible for distributing the grants to businesses in circumstances where they are closed due to local interventions
• further eligibility criteria may be determined by Local authorities
• as with other COVID business grants, local grants to closed businesses will be treated as taxable income